It seems somehow appropriate, doesn't it, that the first British colony in what would become the United States, should be the work of a profit-seeking enterprise, the Virginia Company? But if we are looking at early Virginia for the beginnings of American corporate culture, well, it's not a very promising beginning. The Virginia Company failed; it failed miserably. In 1624, after 18 years of operation, the Virginia Company lost its charter. The crown decided it did such a miserable time that it was going to take control of the colony back into its own hands. The problem that we're going to confront today is whether it had to end that way. Could the Virginia Company have succeeded? And in order to address that issue, we're going to look at it from the vantage point of 1618, a point where there were real alternatives, where the future might have been determined in a way that would have had a more hopeful outcome.

But in order to address this, I think you need to have some background. We need to know a little bit about the Virginia Company itself, and also about the Virginia colony. By the early 17th century, it was clear that colonies could be profitable. Spain demonstrated that. Her treasure ships, which carried gold and for the greater part silver from Peru and Mexico, were the envy of Europe. It was also clear, however, that to start a colony required a very large initial investment, and that the British crown wasn't going to foot the bill. Instead it encouraged private individuals to take on that task. But Sir Walter Raleigh had a few ill-fated efforts to start a colony in Roanoke, you may remember in the 1580s, and it made one very important point: that the cost of this, the cost of transporting colonists over, the cost of supplying them, was far beyond what any single individual, even a very wealthy one, could reasonably undertake. Somehow the cost had to be spread over a large number of people. Fortunately, by the early 17th century, the British had in hand a method of doing that, a device for doing that.

In the middle of the 16th century, the great international mart at Antwerp where they had customarily sold their wool basically bottomed out and never recovered, so they had to develop new places, new routes, where they could sell their goods, and they did this by creating great trading companies. We're talking here the end of the 16th century, the age of the great trading company. The Muscovite Company, for example, formed in 1555, developed trade with Russia; the Levant Company, with the Eastern Mediterranean. The East India Company, 1600, developed trade with India.

It's on that model that the Virginia Company is designed in 1606. It is a chartered joint-stock corporation. That is, it holds a document from the crown, known as a charter, that gives it a specific legal identity with certain rights and privileges. Now, you have in your packet three charters for Virginia, because the Virginia Company actually had three charters. And let's actually talk about those briefly here.

The first, 1606, you'll notice, actually refers to two companies: the Virginia Company of London, which is the one we're particularly interested in, and the Virginia Company of Plymouth. And they are each given permission to found a colony somewhere on the Eastern seaboard of North America, between 34 degrees and 45 degrees, roughly Cape Fear in North Carolina and somewhere near Bangor, Maine. And there is an area in between where either can form a first colony, but that it can't be within 100 miles of the other one. The Virginia Company of Plymouth attempted to form a colony at Sagatahawk in Maine, and it didn't last a winter, so Maine isn't an ideal place to form a first colony.

The Virginia Company of London had a little better luck at Jamestown. They founded a settlement that appeared to last. And once they succeeded in doing that, the crown gave the Virginia Company of London its own charter in 1609. That's, in many ways, a classic corporate charter of the period. The company has a perpetual existence, the corporation does. That's a characteristic of a corporation. The board and the president of IBM can all disappear in good time, but IBM continues. Similar it should have been with the Virginia Company of London. It's a characteristic of a corporation. A corporation is an artificial person which doesn't have to suffer death. In other words, this artificial person has a legal character. It can sue and be sued.